Energomontaż Południe joins the RAFAKO Group
· In connection with the process of streamlining the structure of the PBG Group and implementing the strategy of developing the Group's operations in the power sector based on Rafako, as of January 1st 2012 Energomontaż Południe will be consolidated in the RAFAKO Group.
· 46,021,520 Energomontaż Południe shares, representing 64.84% of the total vote at the company's General Shareholders Meeting, were sold to RAFAKO for PLN 160,154,889.60m.
· The acquisition of Energomontaż Południe by Rafako places Rafako as the leader of the PBG Group's power segment.
On December 20th 2011, PBG signed an agreement on the sale of shares in Energomontaż Południe. The shares were purchased by RAFAKO, member of the PBG Group. The intra-group transaction was executed in pursuance of the strategy aimed at basing the PBG Group's power segment operations on RAFAKO as the leading company, responsible for consolidating the power segment within the Group. Energomontaż Południe will strengthen and supplement the range of services offered by RAFAKO. The inclusion of Energomontaż Południe into the RAFAKO Group will enable the company to offer more comprehensive and competitive services in general contracting projects comprising design, technology delivery, assembly of equipment and steel structures, as well as installation and construction services for power sector customers. The capabilities of Energomontaż Południe in power construction and its vast experience in assembly, upgrade and repairs of equipment and facilities for utility and industrial power plants/CHP plants will strongly boost the market position of the RAFAKO Group as a comprehensive provider of equipment for customers from the utility and industrial power sector.
"The transaction represents a major step in RAFAKO's development and acquisition of new capabilities, which are key to our further growth. Given the tender awarded to RAFAKO in Opole and the company's involvement in new large-scale projects in the Polish power sector, the inclusion in our portfolio of a leading domestic assembly company gives us full independence not only as regards the delivery of complete boiler islands. We can now independently design a power generating unit, manufacture a boiler, equip it with necessary environmental facilities and, thanks to the transaction we have just completed, assemble the whole," said Wiesław Mariusz Różacki, President of Rafako's Management Board.
Terms and conditions of the sale agreement
The transaction price for the 64.84% stake in Energomontaż Południe was set at PLN
160,154,889.60, i.e. PLN 3.48 per share. Within two months of concluding the agreement, RAFAKO will undertake due diligence of Energomontaż Południe, whose findings will be summarised in a report. On the basis of the due diligence report, RAFAKO will be able to raise objections to the transaction price, if any. For instance, it will be able to claim compensation in the cases specified in the agreement, related to a decrease in the value of Energomontaż Południe's assets for reasons other than those associated with the overall financial environment, which however may not be higher thanPLN 20m. The agreement also provides for a price increase mechanism, which will be triggered if Energomontaż Południe reports net profit of PLN 20m or more for the financial year 2012 and net profit of PLN 35m or more for the financial year 2013. In such a case, Rafako will be obliged to make an additional payment to PBG, over and above the transaction price, of PLN 30m. Under the agreement, PBG has an option to repurchase the 64.48% stake in Energomontaż Południe by December 31st 2012.
"We had already announced the intention to sell Energomontaż Południe to RAFAKO. The sale is another step in the implementation of the PBG Group's strategy of developing its operations in the power sector, whereby the whole segment is to be consolidated around RAFAKO as the leading company," commented Jerzy Wiśniewski, President of PBG's Management Board.
Overview of the RAFAKO Group
The RAFAKO Group specialises in turnkey delivery of fully operational power generating units, based on fossil fuels or renewables. As an EPC contractor, RAFAKO is also a supplier of municipal waste incineration systems.
As part of its comprehensive offering, the RAFAKO Group also designs and delivers fully operational boiler islands, complete with all equipment and components, including boilers, furnace systems, as well as flue gas cleaning systems, such as flue gas desulphurisation, nitrogen oxide removal and fly-ash removal systems. Since its establishment in 1949, RAFAKO has become Europe's largest manufacturer of boilers and one of the largest producers of environmental protection systems. Thanks to its expertise and technological excellence, the company, which has approximately 2,000 employees, is among the leading suppliers of comprehensive solutions for the power sector, including state-of-the-art supercritical steam cycle units.
Power construction projects implemented in Poland will be one of the key drivers of the Polish construction market for the next few years.
Depending on the source, it is estimated that over the next nine years the Polish power sector will attract PLN 150bn-200bn* in investments. The four key players in the power sector, namely PGE, Tauron, Energa and Enea, plan to significantly increase capital expenditures in the coming years. They want to focus not only on constructing new conventional power plants, but also on plants using renewable energy sources. The power companies also intend to invest in maintenance and upgrade of the existing units. Currently, the consortia in which PBG is a member are bidding for contracts worth more than PLN 43bn.
"Given the high concentration of work under power construction projects expected in the coming years, the fact that we have our own assembly capabilities - in the form of Energomontaż Południe - will certainly be a source of major competitive advantage," added Wiesław Mariusz Różacki, President of RAFAKO's Management Board.
*source: "Budownictwo energetyczne w Polsce 2011 - Prognozy rozwoju i planowane inwestycje", ("Power Construction in Poland 2011 – Development Prospects and Planned Projects"), PMR Publications, Ministry of the Economy, National Development Strategy 2007-2015, Energy Regulatory Office.
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The PBG Group provides specialist construction services in the area of gas and oil production facilities and fuel facilities, as well as general contractor services in the area of infrastructural, industrial, road and housing construction. |
Contact person:
Kinga Banaszak-Filipiak
Press Officer, IR Director
+48 691 470 491; kinga.banaszak@pbg-sa.pl